Item 1.01 Entry Into A Material Definitive Agreement.
BUSINESS
COMBINATION AGREEMENT
This
section describes the material provisions of the Business Combination Agreement (as defined below) but does not purport to describe all
of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of the Business Combination
Agreement, a copy of which is attached hereto as Exhibit 2.1. Unless otherwise defined herein, the capitalized terms used below are defined
in the Business Combination Agreement.
General
Description of the Business Combination Agreement
On October 6, 2022, ClimateRock, a Cayman Islands
exempted company (“ClimateRock”), entered into a Business Combination Agreement (the “Business Combination
Agreement”) with ClimateRock Holdings Limited, a Cayman Islands exempted company (“Pubco”), ClimateRock
Merger Sub Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of Pubco (“Merger Sub”),
and E.E.W. Eco Energy World PLC, a company formed under the laws of England and Wales (the “EEW”).
Pursuant to the Business Combination Agreement,
subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement
(the “Closing”), (a) Merger Sub will merge with and into ClimateRock, with ClimateRock continuing as the surviving
entity (the “Merger”), as a result of which, (i) ClimateRock shall become a wholly-owned subsidiary of Pubco,
and (ii) each issued and outstanding security of ClimateRock immediately prior to the Effective Time shall no longer be outstanding and
shall automatically be cancelled, in exchange for the right of the holder thereof to receive a substantially equivalent security of Pubco,
and (b)(i) Pubco will make an offer to acquire each issued and outstanding EEW ordinary share in consideration for the issue and allotment
of substantially equivalent securities in Pubco (the “Company Share Transfer”) and (ii) Pubco shall also offer
each holder of EEW’s outstanding vested options to purchase EEW ordinary shares, replacement options to purchase ordinary shares
of Pubco, par value $0.0001 per share (“Pubco Ordinary Shares”), all upon the terms and subject to the conditions
set forth in the Business Combination Agreement and in accordance with the applicable provisions of the Cayman Act and the laws of England
and Wales (the Merger and Company Share Transfer, together, the “Transactions”).
Company Share Transfer and Pubco Offer
The total consideration to be offered by Pubco
to the holders of EEW securities (each, a “Seller”) shall be a number of Pubco Ordinary Shares (the “Exchange
Shares”) with an aggregate value equal to Six Hundred Fifty Million U.S. Dollars ($650,000,000), with each Pubco Ordinary
Share valued at an amount equal to the price at which each ClimateRock ordinary share is redeemed or converted pursuant to the redemption
of ClimateRock’s ordinary shares pursuant to ClimateRock’s organizational documents (the “Redemption Price”).
Once the Registration Statement (as defined
below), which shall include the Exchange Offer Prospectus (as defined below), has become effective, Pubco will make an offer in
accordance with the applicable rules and regulation under the United Kingdom Companies Act 2006 (c 46), as amended (the
“UK Act”), to acquire all of the issued and to be issued ordinary shares of EEW by promptly distributing
the Registration Statement together with a form of shareholder acceptance to all EEW shareholders (the “Pubco
Offer”). The Pubco Offer shall be subject to the following two conditions: (i) the holders of not less than 90% of the
EEW ordinary shares (or such lower percentage as Pubco, with the consent of EEW, may decide) shall have accepted the Pubco Offer,
and (ii) all of the other conditions under the Business Combination Agreement shall have been either satisfied or waived, at which
point Pubco may declare the Pubco Offer wholly unconditional.
As a result of declaring the Pubco Offer wholly
unconditional, the Business Combination Agreement shall also become unconditional and Pubco shall be contractually obligated to acquire
each EEW ordinary share that has validly accepted the Pubco Offer in accordance with its terms and the UK Act, in consideration for the
issuance and allotment of a number of Exchange Shares equal to the Per Share Price (as defined in the Business combination Agreement)
divided by the Redemption Price (the “Conversion Ratio”). Pubco shall, promptly following the date that the
Pubco Offer becomes unconditional, serve statutory squeeze out notices, in accordance with the UK Act, on all holders of the EEW ordinary
shares that have not, at the date of such notice, accepted the Pubco Offer with respect to their EEW ordinary shares.
In addition, Pubco shall make an offer to the
holders of each outstanding option to purchase EEW ordinary shares (whether vested or unvested) to replace such options with options over
Pubco Ordinary Shares (each a “Pubco Option”). Each Pubco Option shall: (i) give the holder the right to acquire
a number of Pubco ordinary shares equal to (A) the number of EEW ordinary shares that the EEW option had the right to acquire immediately
prior to the Effective Time (had such EEW options been fully vested at the Effective Time), multiplied by (B) the Conversion Ratio; (ii)
have an exercise price equal to the quotient of (A) the exercise price of the EEW option (expressed in US Dollars), divided by the Conversion
Ratio and (iii) be subject to the same vesting schedule as the applicable EEW option.
Representations and Warranties
The Business Combination Agreement contains a
number of representations and warranties made by the parties as of the date of such agreement or other specific dates solely for the benefit
of certain of the parties to the Business Combination Agreement, which in certain cases are subject to specified exceptions and materiality,
Material Adverse Effect (as defined below), knowledge and other qualifications contained in the Business Combination Agreement or in information
provided pursuant to certain disclosure schedules to the Business Combination Agreement. “Material Adverse Effect”
as used in the Business Combination Agreement means with respect to any specified person or entity, any fact, event, occurrence, change
or effect that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business,
assets, liabilities, results of operations, or financial condition of such person or entity and its subsidiaries, taken as a whole, or
the ability of such person or entity or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Business
Combination Agreement, or to perform its obligations under the Business Combination Agreement or any agreement ancillary thereto, in each
case subject to certain customary exceptions. The representations and warranties made by the parties are customary for transactions similar
to the Transactions.
In the Business Combination Agreement, EEW made
certain customary representations and warranties to ClimateRock, including among others, related to the following: (1) corporate matters,
including due organization, existence and good standing; (2) authority and binding effect relative to execution and delivery of the Business
Combination Agreement and other ancillary documents; (3) capitalization; (4) subsidiaries; (5) governmental approvals; (6) non-contravention;
(7) financial statements; (8) absence of certain changes; (9) compliance with laws; (10) permits; (11) litigation; (12) material contracts;
(13) intellectual property; (14) taxes and returns; (15) real property; (16) personal property; (17) title to and sufficiency of assets;
(18) employee matters; (19) benefit plans; (20) environmental matters; (21) transactions with related persons; (22) insurance; (23) certain
business practices; (24) renewable energy matters; (25) Investment Company Act of 1940; (26) finders and brokers; (27) information supplied;
and (28) independent investigation.
In the Business Combination Agreement, ClimateRock
made certain customary representations and warranties to EEW and Pubco, including among others, related to the following: (1) corporate
matters, including due organization, existence and good standing; (2) authority and binding effect relative to execution and delivery
of the Business Combination Agreement and other ancillary documents; (3) governmental approvals; (4) non-contravention; (5) capitalization;
(6) the Securities and Exchange Commission (the “SEC”) filings and financial statements; (7) reporting company
and listing; (8) absence of certain changes; (9) compliance with laws; (10) litigation, orders and permits; (11) taxes and returns; (12)
employees and employee benefit plans; (13) properties; (14) material contracts; (15) transactions with affiliates; (16) Investment Company
Act of 1940; (17) finders and brokers; (18) certain business practices; (19) insurance; (20) information supplied; (21) independent investigation;
(22) the trust account and (23) lock-up agreement.
Additionally, each of Pubco and Merger Sub made certain customary representations
and warranties to ClimateRock with respect to Pubco and Merger Sub, including representations and warranties related to the following:
(1) corporate matters, including due organization, existence and good standing; (2) authority and binding effect relative to execution and delivery of the Business Combination Agreement and other
ancillary documents; (3) governmental approvals; (4) non-contravention; (5)
capitalization; (6) title and ownership of the Pubco shares to be issued to the Sellers; (7) Pubco and Merger Sub activities; (8) foreign
private issuer status; (9) finders and brokers; (10) Investment Company Act of 1940; (11) information supplied; and (12) independent investigation.
None of the representations and warranties
of the parties shall survive the Closing.
Covenants of the Parties
Each party agreed in the Business Combination
Agreement to use its commercially reasonable efforts to effect the Closing. The Business Combination Agreement also contains certain customary
covenants by each of the parties during the period between the signing of the Business Combination Agreement and the earlier of the Closing
or the termination of the Business Combination Agreement in accordance with its terms, including covenants regarding: (1) the provision
of access to their properties, books and personnel; (2) the operation of their respective businesses in the ordinary course of business;
(3) ClimateRock’s public filings and EEW’s interim financial statements; (4) no solicitation of, or entering into, any alternative
competing transactions; (5) no insider trading; (6) notifications of certain breaches, consent requirements or other matters; (7) efforts
to consummate the Closing and obtain third party and regulatory approvals; (8) further assurances; (9) public announcements; (10) confidentiality;
(11) indemnification of directors and officers; (12) use of trust proceeds after the Closing; and (13) efforts to support a private placement
or backstop arrangements, if sought.
The parties also agreed to take all necessary
actions to cause Pubco’s board of directors immediately after the Closing to consist of a board of between seven (7) to nine (9)
directors, comprised of: (A) if there are seven (7) directors: (i) two (2) persons who are designated by ClimateRock prior to the Closing
upon mutual agreement with EEW’s chairman, and (ii) five (5) persons who are designated by EEW prior to the Closing; and (B) if
there are nine (9) directors: (i) three (3) persons who are designated by ClimateRock prior to the Closing upon mutual agreement with
EEW’s chairman, and (ii) six (6) persons who are designated by EEW prior to the Closing. The initial directors designated by ClimateRock shall include Charles
Ratelband and Per Regnarsson.
ClimateRock and Pubco also agreed to prepare,
with the reasonable assistance of EEW, and Pubco shall file with the SEC, a registration statement on Form F-4 (as amended, the “Registration
Statement”) in connection with the registration under the Securities Act of the issuance of securities of Pubco to the holders
of the ClimateRock securities and EEW securities, which will also contain (i) a proxy statement/prospectus for the purpose of soliciting
proxies from the shareholders of ClimateRock for the matters relating to the Transactions to be acted on at the extraordinary general
meeting of the shareholders of ClimateRock, and providing such holders with an opportunity to participate in the redemption of all or
a portion of their public shares of ClimateRock upon the Closing (the “Redemption”), and (ii) an exchange offer
prospectus of Pubco for use in connection with the Pubco Offer to the EEW shareholders (the “Exchange Offer Prospectus”).
The parties also agreed that promptly after the
execution of the Business Combination Agreement, EEW would use its best efforts to complete the re-registration of EEW as a private company
limited by shares (the “Re-Registration”), including, among other things, passing a special resolution by the
requisite majority of EEW’s shareholders to (A) re-register EEW as a private company limited by shares, (B) change the name of EEW
to “E.E.W. Eco Energy World Limited” (or such other name as EEW shall nominate) and (C) adopt new articles of association
of EEW.
Conditions to Closing
The obligations of the parties to consummate the
Transactions are subject to various conditions, including the following mutual conditions of the parties unless waived: (i) the approval
of the Business Combination Agreement and the Transactions and related matters by the requisite vote of ClimateRock’s shareholders;
(ii) expiration of any waiting period under applicable antitrust laws; (iii) no law or order preventing or prohibiting the Transactions;
(iv) ClimateRock having at least $5,000,001 in net tangible assets as of the Closing, after giving effect to the completion of the Redemption,
(v) the effectiveness of the Registration Statement; and (vi) the Pubco Offer shall be declared to be wholly unconditional by Pubco.
In addition, unless waived by EEW, the obligations
of EEW to consummate the Transactions are subject to the satisfaction of the following Closing conditions, in addition to customary certificates
and other closing deliveries: (i) the representations and warranties of (A) ClimateRock relating to authorization and binding effect,
organization and standing, capitalization, and finders and brokers, and (B) Pubco relating to authorization and binding effect, organization
and standing, finders and brokers, and capitalization being, in each case, true and correct on and as of the Closing in all material respects;
(ii) the representations and warranties of ClimateRock relating to absence of certain changes being true and correct in all respects on
and as of the Closing; (iii) all other representations and warranties of ClimateRock being true and correct on and as of the Closing,
subject to Material Adverse Effect; (iv) ClimateRock having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on
or prior the date of the Closing; (v) absence of any Material Adverse Effect with respect to ClimateRock since the date of the Business
Combination Agreement which is continuing and uncured; and (iv) after taking into consideration the Redemption, the trust account proceeds
and the proceeds of any private placement, and payment of EEW’s and ClimateRock’s transaction expenses, the amount of cash
available to ClimateRock should equal Forty Million Dollars ($40,000,000) or more at Closing.
Unless waived by ClimateRock, the obligations
of ClimateRock to consummate the Transactions are subject to the satisfaction of the following Closing conditions, in addition to customary
certificates and other closing deliveries: (i) the representations and warranties of EEW relating to authority and binding effect, finders
and brokers, and capitalization being, in each case, true and correct on and as of the Closing in all material respects; (ii) the representations
and warranties of EEW relating to absence of certain changes being true and correct in all respects on and as of the Closing; (iii) all
other representations and warranties of EEW being true and correct on and as of the Closing, subject to Material Adverse Effect; (iv)
EEW having performed in all material respects the respective obligations and complied in all material respects with their respective covenants
and agreements under the Business Combination Agreement required to be performed or complied with on or prior the date of the Closing;
(v) absence of any Material Adverse Effect with respect to EEW since the date of the Business Combination Agreement which is continuing
and uncured, (vi) EEW shall have delivered to Purchaser a certified copy of the certificate of incorporation of EEW following completion
of the Re-registration and (vii) EEW shall have confirmed to ClimateRock in writing that it has informed The Panel on Takeovers and Mergers
in the United Kingdom of completion of the Re-registration.
Termination
The Business Combination Agreement may be terminated
at any time prior to the Closing by either ClimateRock or EEW if the Closing does not occur by April 29, 2023, or such other date that
the parties agree to in writing (the “Outside Date”).
The Business Combination Agreement may also be
terminated under certain other customary and limited circumstances at any time prior the Closing, including, among other reasons: (i)
by mutual written consent of ClimateRock and EEW; (ii) by either ClimateRock or EEW if a governmental authority of competent jurisdiction
shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Transactions, and
such order or other action has become final and non-appealable; (iii) by EEW for ClimateRock’s uncured material breach of the Business
Combination Agreement, such that the related Closing condition would not be met; (iv) by ClimateRock for the uncured material breach of
the Business Combination Agreement by EEW, such that the related Closing condition would not be met; (v) by ClimateRock if there has been
a Material Adverse Effect with respect to EEW since the date of the Business Combination Agreement which is uncured and continuing; and
(vi) by either ClimateRock or EEW if ClimateRock holds its shareholder meeting to approve the Business Combination Agreement and the Transactions
and such approval is not obtained.
If the Business Combination Agreement is terminated,
all further obligations of the parties under the Business Combination Agreement (except for certain obligations related to publicity,
confidentiality, fees and expenses, trust fund waiver, termination and general provisions) will terminate, and no party to the Business
Combination Agreement will have any further liability to any other party thereto except for liability for fraud or for willful breach
of the Business Combination Agreement prior to termination.
Trust Account Waiver, Non-Recourse and Releases
EEW has agreed that it and its affiliates will
not have any right, title, interest or claim of any kind in or to any monies in ClimateRock’s trust account held for its public
shareholders, and have agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom).
The parties agreed that all claims or actions
that may be based upon, arise out of or relate to the Business Combination Agreement or any of the ancillary documents may only be made
against the parties to the Business Combination Agreement and not against any of their past present or future directors, officers, employees,
members, managers, partners affiliates, agents, attorneys or representatives.
Governing Law and Arbitration
The Business Combination Agreement is governed
by Delaware law, except that the laws of England and Wales, and the laws of Cayman Islands solely to the extent required, shall apply
to the Pubco Offer, Company Share Transfer, and the Merger, respectively, in each case without giving effect to the conflict of laws principles.
All actions arising out of or relating to the Business Combination Agreement shall be heard and determined exclusively in any state or
federal court located in New Castle County, Delaware.
Related Agreements
Registration Rights Agreement
At the Closing, certain Sellers and U.N. SDG Support,
LLC, a Delaware limited liability company (the “Sponsor”) will enter into a registration rights agreement with
Pubco pursuant to which (i) Pubco will assume the registration obligations of ClimateRock under that certain Registration Rights Agreement,
dated as of April 27, 2022, by and among Purchaser, Sponsor and the other “Investors” named therein, which obligations will
be applicable to the securities of Pubco; and (ii) such Sellers will receive demand and piggy-back registration rights with respect to
the Exchange Shares received in the Transactions.
Shareholder Commitment Letters
Concurrently with execution of the Business
Combination Agreement, certain major shareholders of EEW (the “Major Shareholders”) entered into
Shareholder Commitment Letters with Pubco, pursuant to which the Major Shareholders irrevocablly agreed to (i) vote in favor of the
Re-Registration and the adoption of new articles of association pursuant to which any EEW ordinary shares issued after the Pubco
Offer is declared unconditional would be automatically sold and transferred to Pubco for consideration equivalent to that offered
pursuant to the Pubco Offer and (ii) accept the Pubco Offer when it is made and not withdraw such acceptance. The Major Shareholders
also agreed to certain restrictions on the sale and transfer of their EEW shares and solicitation with respect to such shares
without Pubco’s consent.
Holder Support Agreement
Concurrently with execution of the Business Combination
Agreement, the Sponsor entered into a Holder Support Agreement, pursuant to which the Sponsor agreed, among other things, to vote in
favor of the adoption of the Business Combination and the Transactions. In addition, the Sponsor agreed to not transfer the Pubco shares
it receives for a period of 180 days after the Closing Date, subject to certain exceptions, including that up to $1.6 million in shares
may be sold immediately after the Closing to satisfy obligations due to an advisor of ClimateRock. The Sponsor also agreed to waive the
anti-dilution protection for conversion of its Class B ordinary shares of ClimateRock that it would otherwise have upon the consummation
of the Business Combination.
The Business Combination Agreement contains representations,
warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The
assertions embodied in those representations, warranties, covenants and agreements were made for purposes of the contract among the respective
parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement.
The Business Combination Agreement has been filed to provide investors with information regarding its terms, but it is not intended to
provide any other factual information about ClimateRock, EEW, Pubco or any other party to the Business Combination Agreement. In particular,
the representations and warranties, covenants and agreements contained in the Business Combination Agreement, which were made only for
purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Business Combination Agreement,
may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the
purposes of allocating contractual risk between the parties to the Business Combination Agreement instead of establishing these matters
as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors
and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements,
or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Business Combination Agreement.
In addition, the representations, warranties, covenants and agreements and other terms of the Business Combination Agreement may be subject
to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other
terms may change after the date of the Business Combination Agreement, which subsequent information may or may not be fully reflected
in ClimateRock’s public disclosures.
The Holder Support Agreement, the
Shareholder Commitment Letters and the Registration Rights Agreement are filed with this Current Report on Form 8-K as Exhibits
10.1, 10.2, 10.3 and 10.4 respectively, and are incorporated herein by reference, and the foregoing descriptions of
the Registration Rights Agreement, Shareholder Commitment Letters and the Holder Support Agreement are qualified in their entirety
by reference thereto.
